Open Source Software Hits a Strategic Tipping Point

Imagine you’re in charge of software selection for your enterprise, and you’re turning your attention to a specific IT challenge. It’s a business-critical need requiring software that is capable of some heavy lifting. Do you consider open source software for the job?

If you’re like a growing number of IT executives, then yes, you do. Based on surveys my colleagues at Gartner and I have conducted over the past several years, mainstream adopters of IT solutions across a widening array of market segments are rapidly gaining confidence in the use of open source software, with many now stressing its valuable features more than its risks.

Before describing our latest findings, I should pause to define the term. “Open source” refers to the fact that users of the software are given free access to its source code and, depending on the terms of their license, can also modify and redistribute that code. At Gartner, we consider any software to be open source that is released under licenses and terms defined by the open-source initiative. A tremendous amount of hype surrounds the open source movement — and for good reason. Because most open source software is cheap (if not free) and all of it repudiates the notion of proprietary code, it has the potential to be a serious disruptor of the traditional, commercial closed-source software business.

To what extent is that already happening? Where are organizations already using open source software, and why? To find out, we surveyed 547 IT leaders in 11 countries. (Data here reflect responses received in July-August 2010).

Overall, we found that more than half of our survey respondents have adopted OSS solutions as part of their IT strategy. In fact, OSS makes up nearly one-third of responding organizations’ overall enterprise software portfolio, which is, interestingly enough, about the same as the proportion of internally developed software.

As shown in the accompanying chart, the greatest number of respondents (46 percent) use OSS in specific departments and projects. But some 22 percent report they are adopting OSS consistently in all departments of the company. Meanwhile, a nearly equivalent fraction of respondents (21 percent) said they are just in the process of evaluating the advantages of OSS usage.

Source: Gartner

From the perspective of total deployed software portfolios (including both applications and infrastructure), open source software is also making gains. As a group, respondents told us that open source projects make up 29 percent of their collective portfolios (making them only slightly less prevalent than internally developed software projects, which constitute 29.4 percent of porfolios). That’s a dramatic change from five years ago, when a Gartner survey found that the amount of open source software in responding organizations’ portfolios was less than 10 percent. Across that same period, we’ve seen the proportion of proprietary software decrease at about the same rate that open source software has increased. Interestingly, internally developed software has not decreased but increased in the past five years, suggesting that it is combinations of open source and internally built software that are displacing some proprietary software.

Breaking down that aggregate finding about portfolio composition, the percentage of respondents for whom open source makes up more than a quarter of their portfolio has now reached 60. Proprietary or commercial software still dominates software portfolios, with 79 percent of organizations saying it constitutes more than 25 percent of their portfolio, meaning that proprietary or commercial software is leading the software portfolios.

Looking to the future, the next 18 months can be expected to bring more incursions of open source software into enterprise portfolios, though not drastic ones. Sixty-two percent of organizations surveyed indicated that their usage of open source software in deployed software portfolios would exceed 25 percent by then. (The same percentage expect their portfolios to be made up of more than 25 percent internally developed software.) But a full 17 percent of organizations expect their portfolios to be 50 to 74 percent made up of open source software. in their deployed software portfolios, which is a 3 percentage point increase from the current budget year.

Why this increased adoption of open source software? While the survey results suggest that organizations continue to focus on its use as a way to lower costs, open source software has gained increased respect since past surveys along other dimensions. Nearly a third of respondents now cite benefits of flexibility, increased innovation, shorter development times, and faster procurement processes. For the first time in a Gartner open source survey, we saw the number of respondents claiming to use open source software primarily to gain competitive advantage reach 11 percent. This may have to do with a realization that, when code can be customized to the unique needs of a company, it can give that company an edge. In any case, IT leaders are apparently beginning to see value in open source software beyond simply “getting something for free.”

Meanwhile, the emergence of external service providers — among them consultants and specialists in installation, maintenance and support, customized adaptations, and training — will also make open source software a more attractive option for many enterprises, and allow it to be applied in more mission-critical environments. End-user organizations will gain more in-depth understanding and skill sets relating to open source software as they venture further into its use.

Even as our survey painted a rosy picture of the future of enterprise use of open source software, it also surfaced a concern. Most organizations, it revealed, have not established a policy framework to guide decision-making on the use of open source software. A proper framework would outline types of licenses acceptable to the organization, guidelines pertaining to intellectual property, regulations governing contributions to external projects, and an approved vendor/project list. Just a third of respondents claimed their organizations have anything like this kind of policy structure; the rest rely on ad hoc or informal processes.

This, I would suggest, must be a priority for IT executives in the coming year. Our survey indicated that number of enterprises still in a “proof of value” stage with regard to open source software has dropped significantly just since our last survey in the fourth quarter of 2008. Organizations are fast getting over their qualms about open source software. Now it’s time for them to develop and implement formal policies, and start managing open source software like the strategic resource that it is.

Laurie Wurster is a research director at Gartner. She focuses on application development, open-source technology, and project and portfolio management.